Question: 1 -Given the following information, compute the current and quick ratios: Cash $100,000 Accounts receivable 357,000 Inventory 458,000 Current liabilities 498,000 Long-term debt 610,000 Equity
1 -Given the following information, compute the current and quick ratios:
Cash
$100,000
Accounts receivable
357,000
Inventory
458,000
Current liabilities
498,000
Long-term debt
610,000
Equity
598,000
Answer
2-If a firm has sales of $25,689,000 a year, and the average collection period for the industry is 45 days, what should this firm's accounts receivable be if the firm is comparable to the industry?
3- ABCD Corporation has credit sales of $10,640,000 and receivables of $1,520,000.
a.What is the receivables turnover?
b.What is the average collection period (days sales outstanding)?
- If the company offers credit terms of 30 days, are its receivables past due
4- A firm with sales of $500,000 has average inventory of $200,000. The industry average for inventory turnover is four times a year. What would be the reduction in inventory if this firm were to achieve a turnover comparable to the industry average?
5- A firm's balance sheets for the last two years are as follows:
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